Blood On the Streets

Published: Wed, 10/10/18

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When there is blood on the streets there is hope that things can get better. So here are a few charts that offer hope. No market goes down in a straight line as much as we are in the sixth week of declines for the NIfty but a lot has been done recently to avert the situation from hell. Similar measures in Brazil paid off and their currency and bond yields have both gone the other way unnoticed.

First a deep dive into our currency

USDINR - is in minor wave v of an impulse about to complete, but v=i levels depend on where you take the low. from the low of iv it is complete and from the end point of iv as a triangle it goes to 74.78. The final push going on till complete, then we get a reversal or consolidation.

usdinr 061018

With that let me give you the chart of the day. USDINR from the start of this year could complete a 5 wave advance. Remember the complex consolidation in June and July not a clear impulse. If I consider that as part of a triangle in wave 4 as shown here then we are in wave 5 and wave 5=2014-2015 rally is near 74.80 and the rising channel for wave 5 itself is already met yesterday. So this construction allows for a 5 wave move to complete and for us to consider a more meaningful pullback in the USDINR pair. Initially 71.50 near the wave iv low and the 40dema would be a good support if this happens. We need actual price confirmation yet. Here wave 5=(1-3) is also at 74.72.

usdinr 061018a

Then let us look at the US Markets because after many calls for a final top it falls and then heads higher. The answer may lie in the triangle pattern that ended in May of this year.

The US 500 index, S&P, fell to the lower trendline yesterday but is still to break it. So this is a make or break level. If it holds then this fall was wave 4 and one more new high in wave 5 to the upper end of the rising channel would be seen to 2990.

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Prepare for what comes next and do not extrapolate the past into the future. Act when the herd does not care not when the herd gets slaughtered. Wait for the opportunities, they always show up.

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Rohit Srivastava
www.indiacharts.com
For accurate market forecasting. Market forecasting is a study of past data to assess
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